Union Planters Bank, N.A. v. Peninsula Bank

InterAmerican Car Rental, Inc. (InterAmerican) was in the business of renting cars. In 2002 InterAmerican failed to honor its financial obligations and defaulted on several loans. InterAmerican’s secured creditors sought to recover on their interests. Under Florida law Chapter 319, a creditor was required to perfect a security interest in a vehicle by noting its lien on the vehicle’s title and by filing a sworn statement of lien. Peninsula Bank and Ocean Bank (defendants), two of InterAmerican’s creditors, had both filed according to Chapter 319 to perfect their interests. However, Union Planters Bank, N.A. (Union) (plaintiff) had filed a financing statement rather than following the procedure listed in Chapter 319. Union had filed its financing statement before Peninsula Bank or Ocean Bank had noted their liens on the titles. Although Union did not perfect according to Chapter 319, Union argued that it was exempt pursuant to § 679.3111, Florida Statutes (2002), which provided that perfection in vehicles that were inventory held for disposal through sale were perfected by filing a financing statement. Union argued that because InterAmerican sold its used rental cars—4,000 per year, reflecting 60 to 70 percent of its income— InterAmerican was actually in the business of selling used cars. Union made this argument, although the Uniform Commercial Code (UCC) § 9-3111, comment 4 explains that just because a debtor ends up selling a good does not mean the debtor is in the business of selling such goods. Also, § 320.21(1)(c), Florida Statutes (2002), exempts those who are disposing of vehicles that were secured for personal or business use from classification as a motor-vehicle dealer. Union brought suit against Peninsula Bank and Ocean Bank. Both parties filed for summary judgment. The trial court did not accept Union’s argument that InterAmerican was in the car-sales business and ruled in favor of Peninsula Bank and Ocean Bank. Union appealed.